PC Connection (NASDAQ: CNXN) and EMC (NYSE:EMC) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for PC Connection and EMC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PC Connection 0 0 1 0 3.00
EMC 0 0 0 0 N/A

PC Connection presently has a consensus target price of $33.00, suggesting a potential upside of 26.73%. Given PC Connection’s higher possible upside, research analysts clearly believe PC Connection is more favorable than EMC.

Dividends

EMC pays an annual dividend of $0.46 per share and has a dividend yield of 1.6%. PC Connection does not pay a dividend. EMC pays out 43.0% of its earnings in the form of a dividend. PC Connection has increased its dividend for 3 consecutive years.

Risk and Volatility

PC Connection has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500. Comparatively, EMC has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Profitability

This table compares PC Connection and EMC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PC Connection 1.66% 11.39% 7.37%
EMC 10.47% 10.66% 5.47%

Institutional and Insider Ownership

41.4% of PC Connection shares are owned by institutional investors. Comparatively, 79.9% of EMC shares are owned by institutional investors. 57.3% of PC Connection shares are owned by insiders. Comparatively, 0.4% of EMC shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares PC Connection and EMC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PC Connection $2.86 billion 0.24 $90.07 million $1.79 14.55
EMC N/A N/A N/A $1.07 27.15

PC Connection has higher revenue and earnings than EMC. PC Connection is trading at a lower price-to-earnings ratio than EMC, indicating that it is currently the more affordable of the two stocks.

Summary

PC Connection beats EMC on 10 of the 13 factors compared between the two stocks.

PC Connection Company Profile

PC Connection, Inc. is a provider of a range of information technology (IT) solutions. The Company conducts its business operations through three business segments: small- to medium-sized businesses (SMB), Large Account and Public Sector. The Company enables customers to design, enable, manage and service their IT environments. The Company’s IT products include computer systems, software and peripheral equipment, networking communications, and other products and accessories that the Company purchases from manufacturers, distributors and other suppliers. The Company also offers services involving design, configuration and implementation of IT solutions. The Company markets its products and services through its Websites, including www.connection.com, www.connection.com/enterprise, www.connection.com/publicsector, and www.macconnection.com. It uses a combination of outbound telemarketing, including some on-site sales solicitation by business development managers.

EMC Company Profile

EMC Corporation (EMC) develops, delivers and supports the information technology (IT) industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. EMC manages the Company as part of a federation of businesses: EMC Information Infrastructure, VMware Virtual Infrastructure, Pivotal and Virtustream. EMC’s Information Infrastructure business provides a foundation for organizations to store, manage, protect, analyze and secure information. EMC’s VMware Virtual Infrastructure business is engaged in virtualization and cloud infrastructure solutions that enable businesses to help transform the way they build, deliver and consume IT resources in a manner that is based on their specific needs. EMC’s Pivotal business unites strategic technology, people and programs from EMC and VMware and has a platform that consists of data, agile development practices and a cloud independent platform-as-a-service.

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